Australian dollar keeps rising on strong Chinese data

THE Australian dollar was higher at noon as China's better-than-expected domestic product (GDP) data continues to buoy the local currency.

THE Australian dollar was higher at noon as China's better-than-expected domestic product (GDP) data continues to buoy the local currency.

At 12pm (AEST) today, the Australian dollar was trading at 107.74 US cents, up from 106.39 US cents yesterday.

Since 7am today, the local unit traded between 107.41 US cents and 107.97 US cents.

China yesterday released data showing GDP growth eased to 9.5 per cent in the second quarter of 2011, but still beat market forecasts of 9.4 per cent.

CMC Markets chief market strategist Michael McCarthy said the upbeat news bolstered the local unit in morning trade.

"Quite clearly the driver of this recent strength is that data that came out of China showing that they're growth story remains on track, and that's good news for commodities, and good news for commodity currencies like the Australian dollar," Mr McCarthy said.

He said the upbeat China data had overshadowed ongoing debt concerns in Europe.

Overnight, US Federal Reserve chairman Ben Bernanke said the central bank was open to the idea of applying another round of quantitative easing (QE), or buying up of Treasury bonds, if economic conditions worsen.

This comes as the International Monetary Fund (IMF) warned Greece needed another €100 billion ($132.7 billion) in aid to avoid a default, and that it should come from the European Union and private creditors.

"The impact for Australia from the European situation is still unclear, but the key risk appears to be sentiment driven, rather than actual economic exposure," Mr McCarthy said.

"Frankly, Greece has been going broke for 400 years."

He expected the afternoon session would see the local unit move higher on the back of the positive China story.

"I'm reasonable confident we'll see a test of the 108 level, and how we go from there will determine the direction for the rest of the day," he said.

"It's quite possible that stock-loss buying could push us up to that 108.50 level quite quickly."